EghtesadOnline: T he government is committed to meeting all hard currency needs, including the ones that exceed the current caps devised in the wake of the foreign exchange rate unification implemented last month, Government Spokesman Mohammad Baqer Nobakht said on Sunday.

"The government, as per its new forex policy, is determined that all exporters bring their earnings into the economic network and all importers receive their needs from the same place," Nobakht was quoted as saying by IBENA.

"As for those that receive currency for a particular reason like travelers who have extra needs and due to the fact that we recognize no other market as legal and official, we have an obligation to provide for those needs as well."

The decision to unify the dollar's exchange rate at 42,000 rials was made in the wake of a sharp slide in the value of rial in the early days of the current Iranian year that began on March 21, according to Financial Tribune.

According to the measures, the US dollar for all purposes, including imports, travel, overseas students and research projects, will be offered by the government without a limit at the exchange rate of 42,000 rials.

The announcement was later followed by several other measures approved by the Cabinet and subsequently notified by the Central Bank of Iran.

It was decided, among other measures, that travel currency would be allocated only up to €1,000 or its equivalent in other currency once a year and €500 if the trip is made to a neighboring or allied country.

According to the new rules, the possession of foreign exchange by individuals is allowed only up to a ceiling of €10,000 or its equivalent in other currencies and anyone possessing more than this amount should either deposit it in a bank or sell it to the banking system.

The central bank has also launched the Integrated Foreign Currency System (locally known as Nima) in order to track all forex transactions that involve banks, exchange houses, importers and exporters.

The control measures have been criticized by some as too restrictive and causing currency dealings to be relegated to the underground economy.

Nobakht added that Nima is being tracked by CBI on a daily basis so that all importers can place their purchases at the 42,000-rial rate and exporters can sell their currency at the same rate.

The official acknowledged that there are still forex needs that have not been envisioned by the new measures, but the government has held meetings to identify and address those needs.

Full Oversight

Also on Saturday, CBI Governor Valiollah Seif held a meeting with CEOs of banks and representatives of bureaux de change to review the latest developments of forex market.

Seif said at the meeting that Nima has been well-received by market players, adding that his bank has "complete oversight" on the market through the system.

"In the past four decades, we witnessed lots of volatility in the market due to the lack of complete oversight but luckily that is now possible through Nima," Seif was quoted as saying by CBI's website.

He also called on exchange houses to have more activity on Nima just like the banks, calling on both banks and exchangers to offer their views for bettering the system.

The CBI chief last week acknowledged shortcomings in the government's new foreign exchange policy, including Nima, saying that they would go away gradually.

"About controls [or limits] on using foreign exchange, such as the €1,000 cap per trip, there will certainly be problems along the way," he had said at the time.

Seif had criticized the fact that Iranians make too many foreign trips, something that he believes causes capital flights and deals a blow to "the economic structure of the country". He later conceded that traveling is the right of all Iranians.